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Bank of America rolls out new, smaller branches

Even as it pares its branch network, Bank of America has become the latest bank to experiment with smaller locations, unveiling on Tuesday “express centers” planned for Charlotte and other markets.

Visitors to the express branches will be able to interact with tellers through video screens. Bank of America says the automated teller machines, unveiled in April and dubbed Teller Assist, will enhance convenience because customers can get real-time assistance from tellers outside normal banking hours.

The Charlotte bank’s announcement comes as the industry overhauls its branch model to cut costs and adapt to changing consumer habits. Visits to tellers at branches are on the decline as more people switch to online and mobile banking.

Bank of America plans to open five express branches by the end of the year, in addition to one it launched on Wall Street in late August. The five are planned for Charlotte, Boston and New York. The bank would not disclose how many of the five will come to Charlotte, or their addresses.

The new branches will also feature employees stationed in the lobby to show customers how to use mobile-banking technology. Employees, the banks says in a fact sheet, “won’t be behind teller lines.”

Bank of America’s express branch on Wall Street is roughly 2,200 square feet. That’s roughly half the size of a traditional Bank of America branch, which on average ranges from 4,100 to 5,900 square feet, according to the bank.

As Bank of America adds the express branches, it has been making large cuts to its U.S. branch network.

According to a report last week from SNL Financial, the bank had sold 118 branches this year, more than any other bank. Bank of America has been selling and shuttering branches as part of its massive companywide cost-cutting program known as Project New BAC, announced in 2011.

Part of a trend

Bank of America’s unveiling of its new type of branch comes after other banks have made similar announcements.

In April, San Francisco-based Wells Fargo said it is piloting a branch in Washington, D.C., that is at least one-third the size of a typical Wells Fargo branch. The new “neighborhood bank” branches allow Wells to open stores in places where it might not have the space for a traditional branch, the bank has said.

Bob Meara, a senior analyst for research firm Celent, says new, smaller branches come with lower costs than traditional branches. Traditional branches are less automated and have more full-time employees than the new ones banks are testing, Meara said.

For Bank of America, which is trying to cut costs, “the branch is an obvious place to look,” he said.

‘Hub and spoke’ approach

Bank of America says its new branches will complement its traditional branches, not replace them.

Ed O’Brien, a director for Mercator Advisory Group, sees that as part of a trend in which banks now offer customers a variety of branch types in one market, from so-called flagship locations and traditional branches to miniature ones.

“It is, in many ways, like an efficient hub-and-spoke operation, where there are choices, particularly within major metropolitan areas and probably high-population suburbs,” he said.

“The banks don’t always have to provide a 10,000-square-foot branch, and nor do the customers necessarily want that.”

Roberts: 704-358-5248; Twitter: @DeonERoberts
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